CoPS/IMPACT Working Paper Number G-230

Title: Microeconomic Reform and Income Distribution: The case of Australian Ports and
Rail Freight Industries

Authors: George Verikios and Xiao-guang Zhang

Abstract

We analyse structural changes in the Australian ports and rail freight industries
during 1990s that were driven by microeconomic reform. We estimate the direct and
indirect effects on household income groups of these industry changes by applying a
computable general equilibrium model incorporating detailed household income and
expenditure accounts, and microsimulation behaviour. The model contains both top-down and
bottom-up linkages. The structural changes lead to a small increase in household welfare
in most regions, with an overall increase of 0.18%. Income inequality is estimated to
have decreased slightly by 0.02%.